WILLIAM H, GATES SR, CELEBRATED HIS 81ST BIRTHDAY Thm'sday by telling an audience of heavy-hitting philan thropists, nonprofit executives and private bankers that idolizing the super-wealthy as supremely talented or intel ligent is nothing more than "unadulterated nonsense."
Coming from the father of the wealthiest citizen of them all,' Microsoft founder and multibillionaire Bill Gates, that might sound more than a little disingenu ous. But the elder Gates, who serves as co-chairman of the Bill & Melinda Gates Foundation, was making a point: Om home-grown billionaires "are rich ... because they are Americans," he declared American society, offering citizens everything from funding for techno logical development to· the rule of law, "made their comfortable lives possible." The clear message:
Wealthy Americans have not only the means but the obligation to help others, and in a big way.
Judging from the applause that rang through the rotunda of New York's Guggenheim Museum, his call to action fell on receptive ears. But the gathering, organized by Morgan Stanley and including donors with collective giving power of $60. billion, also under scored the questions and challenges faced by big phi lanthropists today. For starters, should their founda tions last forever or spend down all their assets within a defined period in order to have the biggest impact on urgent problems? Gates Sr., the keynote speaker, came down firmly in the latter camp, disclos ing that the Gates Foundation will spend all of its assets within 50 years of the death of its last trustee.
One of the most controversial questions was raised during a panel discussion and continued to be debated among small groups during a gourmet lunch: What type of cause most merits support'? What, the attend ees wondered, is the appropriate weight to give to funding for the arts and other "quality of life" causes in a world where a sixth of the population is teetering on the brink of survival? One audience member argued his personal approach was about addressing human pain and suffering rather than spreading joy-but the response from panelists was mixed. "It's not my belief that you start [your philanthropic giving] purely with the greatest amount of suffering," argued William Ran dolph Hearst III, president of the William Randolph Hearst Foundation.
William G. Bowen, former president of the Andrew W. Mellon Foundation and former president of Prince ton University, pointed out that funding he oversaw for budding opera singers in Cape Town killed two birds with a single stone. It opened new career op tions for recipients and helped those who, under the apartheid regime, were discriminated against and could not have pmsued this kind of opportunity.
Columbia University's Jeffrey Sachs, author of the influential The End of Poverty, summed up his view bluntly: "All of you have the capacity to save thou sands of lives, perhaps even millions of lives," he said. looking around his audience. Crop yields in Mril'a continue to languish at about a third of the level they could reach, he says, while two million children die each year fo1' lack of $5 anti-malaria bed nets. "We are leaving people to die for no reason."
Despite the disagreements, some general rules-of· the-road for effective giving emerged from the discus sions:
Rule 1: Choose your causes carefully. "Something r did at Mellon was to kill off things we didn't have enough knowledge to do," Bowen said. Scattershot gifts aren't helpful, he argued. Nor, said Rita Eo Hausel; a lawyer and president of the Hauser Founda tion, are donors who aren't informed about or passionate about the causes they support.
Rule 2: Donors have power-and should be prepared to use it. "They don't put you on the board of the local museum because they like your blue eyesl" said Hauser, referring to expectations that board meri/ bel'S make large gifts. But board members certainty can say how their gifts should be used,and organizations will likely be willing to accommodate those preferences.
Rule 3: Keep an open mind. Hearst said the found~ tion started by his grandfather keeps a small part of i annual giving budget for what he calls "strange" phil a thropy: oddball ideas that are high-risk, but that m end up transforming the world. Keeping an open mil also means being flexible about the kind of accountah ity you demand from a nonprofit organization. "In the nonprofit world, there are 10 different kinds of bottom lines" Hearst said. "If I'm not willing plan for failure, then I'm not doing it right."
Rule 4: Two can be strong~' than one. "No problem can l~ solved by anyone solo," sar-' Sachs. Philanthropists can bal together, whether on a project-by project basis or in a more compr¢ hensive way, as Warren Buffett has done in structuring his relationship with the Gates Foundation. William Gates Sr. said he wouldn't rule out the foundation accepting other significant grants from philanthropists in the future, assuming that their inter ests tied in with the foundation's mission.
But, be careful who you invite to join you in your mission. Sachs cautioned that private donors can be more agile and creative than "lumbering" organizatio~s like the World Bank. "I wouldn't give them the fil'$t call," he said.
Giving money away, as any serious philanthropist will tell you, is every bit as hard as making it. Maybe even
harder. _
